Bus drivers are being given cheap train tickets because they cannot afford to live in the Brighton and Hove.

The soaring cost of housing has prompted Brighton and Hove Bus and Coach Company to strike a deal with local rail companies.

Managers hope the offer, finalised last night, will help combat the high turnover of staff who are being forced out of the company because they can not afford homes in the city.

Managing director Roger French said the deal with Thameslink and South Central trains would allow drivers to live in other areas but stay on at the firm.

He said in the summer of 2000, the bus company had its worst level of staff turnover, with a quarter of drivers leaving the company in a year.

That level has been now reduced to 15 per cent.

It was hoped the rail package would prove an extra incentive to retain and recruit workers.

Mr French said: "It's still difficult to recruit because of the cost of housing in the city. We're finding that we are attracting staff from further outside the city, from places such as Worthing, Littlehampton and Eastbourne."

He said bus company managers were constantly trying to come up with ways of improving benefits to its staff.

He said: "What's coming through is that, as employers, we have to be innovative and continually looking at ways of improving pay packages for staff and we have to keep doing it to keep ahead of companies which are trying to do the same."

House prices in Brighton and Hove have soared by more than 21 per cent in the past year and, according to the latest Land Registry figures, a typical three-bedroom terrace home costs more than £189,000.

Buyers need an income of £52,000 to afford a mortgage.

Typically, a bus driver working an optional sixth day overtime takes home about £350 a week, a shortfall of more than £30,000.

The boom in the city's housing market is affecting many services and Unison leaders have warned employers may have to consider paying London weighting to its staff.

But Mr French said this would prove difficult as it would mean price hikes in bus fares to cover the cost.

Mr French said all staff who left the company were given an exit interview to discover their reasons for leaving.

He said although many staff left for a change of career, it was clear others were locating to other areas where the cost of living was lower yet the wages only slightly less.

The most recent drivers to leave went to Wales, Devon and Manchester.

The company has raised pay by 21 per cent in the last three years.

The company has been able to come to a deal with the rail companies because they are part of the Go-Ahead Group, which also owns the bus company.